CIOs Priorities: Cut Costs, Keep Customers

Oct 18, 2002

Dan Orzech

More than 90% of organizations plan to spend as much or more on IT next year as they did this year, according to a new study.

The survey, of nearly 500 IT executives in Europe and the United States, also found a back-to-basics mentality among CIOs, with IT executives focusing on cost reduction, improving profitability, and customer retention.

"With the economy stalled, there is more of a focus on business fundamentals such as costs and profitability," says Kevin Roche, North American general manager of Getronics, a Netherlands-based international systems integrator and outsourcing vendor. The survey was conducted by Gentronics, in conjunction with International Data Group (IDG) Research.

While the global recession may not be over, IT leaders are looking ahead and planning for growth again, according to the the report. Executives at 41% of the companies surveyed expect increases in IT spending next year, while another 44% say they think spending will remain unchanged. This finding was consistent across industries and for companies of all sizes.

Cutting costs was the top priority among IT executives: 67% of the respondents ranked it among their top-three business priorities. Increasing profits was in the top-three list for 58% of those surveyed, followed by 52% for "increase customer loyalty."

The leading IT spending priorities, according to the study, are security, e commerce, CRM and ERP. At the bottom are supply chain automation, wireless and upgrade/replacement.

Despite the effects of 9/11, security was actually a higher priority among European firms than U.S. companies. 38% of European IT departments listed security as a top priority; in the U.S. that number was 23%.


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